Correlation Between Koninklijke Ahold and Dingdong ADR
Can any of the company-specific risk be diversified away by investing in both Koninklijke Ahold and Dingdong ADR at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Koninklijke Ahold and Dingdong ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koninklijke Ahold Delhaize and Dingdong ADR, you can compare the effects of market volatilities on Koninklijke Ahold and Dingdong ADR and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Koninklijke Ahold with a short position of Dingdong ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke Ahold and Dingdong ADR.
Diversification Opportunities for Koninklijke Ahold and Dingdong ADR
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Koninklijke and Dingdong is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Ahold Delhaize and Dingdong ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dingdong ADR and Koninklijke Ahold is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Koninklijke Ahold Delhaize are associated (or correlated) with Dingdong ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dingdong ADR has no effect on the direction of Koninklijke Ahold i.e., Koninklijke Ahold and Dingdong ADR go up and down completely randomly.
Pair Corralation between Koninklijke Ahold and Dingdong ADR
If you would invest 387.00 in Dingdong ADR on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Dingdong ADR or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Koninklijke Ahold Delhaize vs. Dingdong ADR
Performance |
| Timeline |
| Koninklijke Ahold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Dingdong ADR |
Koninklijke Ahold and Dingdong ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke Ahold and Dingdong ADR
The main advantage of trading using opposite Koninklijke Ahold and Dingdong ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke Ahold position performs unexpectedly, Dingdong ADR can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Dingdong ADR will offset losses from the drop in Dingdong ADR's long position.| Koninklijke Ahold vs. Sendas Distribuidora SA | Koninklijke Ahold vs. Dingdong ADR | Koninklijke Ahold vs. Albertsons Companies | Koninklijke Ahold vs. Village Super Market |
| Dingdong ADR vs. Village Super Market | Dingdong ADR vs. Weis Markets | Dingdong ADR vs. Sendas Distribuidora SA | Dingdong ADR vs. Ingles Markets Incorporated |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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